IMF approves $1.7 bln aid installment for Ukraine - Bloomberg

Ukraine has won IMF management’s endorsement for getting the next installment of its $17.5 billion, according to a Bloomberg’s source familiar with the matter.

REUTERS

Following the adoption of laws required by the fund and progress on a debt restructuring with creditors, the conflict-torn nation is likely to win formal approval for the $1.7 billion disbursement as soon as July 31, when the International Monetary Fund’s executive board is scheduled to meet on the issue, Bloomberg reported citing its undisclosed source.

The Washington-based fund said in April it was vital that Ukraine reach a restructuring settlement with its bondholders before the next tranche was disbursed. IMF Managing Director Christine Lagarde softened that stance last month, saying that the fund can keep supporting Ukraine even if an accord with creditors “cannot be reached in a timely manner.”

Ukrainian bonds rallied earlier on Friday after the government said it made an interest payment on time, showing debt-restructuring negotiations are making progress. The nation’s debt maturing July 2017 rose to a five-month high.

With Ukraine having fulfilled its reform promises to the fund’s satisfaction, IMF officials have been sufficiently encouraged by the pace of talks to recommend release of the $1.7 billion installment, the source said.

The country and its creditors have been making “good progress” in discussions on a debt deal, IMF spokesman Gerry Rice said separately Thursday at a regularly scheduled briefing in Washington.

The government and a group representing creditors agreed in a joint statement July 16 to work on “narrowing the gaps” between their proposals after meetings in Washington attended by Finance Minister Natalie Jaresko.

Lawmakers in Kyiv last week passed laws on utility prices, anti-corruption efforts, deposit guarantees and improvements in the ability of the state energy company to collect receivables.

After completing a staff mission to Ukraine in May, IMF officials revised down their economic projection for the country to a contraction in output of 9% this year.

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